Daily Digest

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Daily Digest 10/26 - New Federal Rules For Debt Collectors, Peak Oil And The Challenging Years Ahead

Friday, October 26, 2012, 10:45 AM

Economy

Ottawa's Long-Term Debt Plans Shelved (westcoastjan)

It was just five years ago that the government was promoting an ambitious plan called Advantage Canada that promised to erase the country’s net public debt “by 2021 at the latest,” according to Mr. Flaherty’s 2007 budget.

Thousands of Victorians have their cash frozen after collapse of Banksia Financial Group (Nervous Nelly)

Mr Hawkins said major residential, hotel and commercial developments in Sydney had faced multi-million dollar valuation and financing problems, helping to bring the collapse on.

ASIC said it was "aware" of yesterday's developments with Banksia but did not disclose when it was first notified about the financial group's problems.

Standard of Living Is in the Shadows as Election Issue (jdargis)

The causes of income stagnation are varied and lack the political simplicity of calls to bring down the deficit or avert another Wall Street meltdown. They cannot be quickly remedied through legislation from Washington. The biggest causes, according to interviews with economists over the last several months, are not the issues that dominate the political debate.

Amid Cutbacks, Greek Doctors Offer Message to Poor: You Are Not Alone (jdargis)

Life in Greece has been turned on its head since the debt crisis took hold. But in few areas has the change been more striking than in health care. Until recently, Greece had a typical European health system, with employers and individuals contributing to a fund that with government assistance financed universal care. People who lost their jobs received health care and unemployment benefits for a year, but were still treated by hospitals if they could not afford to pay even after the benefits expired.

New Federal Rules For Debt Collectors (jdargis)

"There has been an explosion of shady debt collection tactics in recent years,” Suzanne Martindale, a staff attorney for Consumers Union, said. “Businesses have a right to collect what they are owed but not to harass consumers for debt that has been already paid off or doesn’t belong to them.”

Peak Oil And The Challenging Years Ahead (James S.)

Without substitutes at a price that the economy can afford, economies will adapt to lower amounts of oil they can afford by worsening recession, debt defaults, and reduced international trade. There may be tendency for international alliances (such as the Euro) to fall apart, for countries to break into smaller units (Catalonia secede from Spain, or countries break up the way the Soviet Union and Yugoslavia did).

Agriculture ETFs: What Would Jim Rogers Do? (David B.)

DBA is by far a more popular fund than its competitor, with over $1.8 billion in assets; that’s more than 35 times the size of RJA ($50 million). Also, DBA trades more than 3 times as many shares on an average day, keeping it in the limelight. But the drawbacks for this product are twofold. For starters, DBA utilizes the ETF structure, meaning that it is subject to tracking error that can throw off underlying returns. This also means that the fund will issue a pesky K-1 come tax season, a form that many wish to avoid.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

8 Comments

saxplayer00o1's picture
saxplayer00o1
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littlefeatfan's picture
littlefeatfan
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More 3E related Links, Resources and Cartoons

http://3es.weebly.com/ The 2nd Law Edition 

rjs's picture
rjs
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Myth Drives the Budget Fuss

 Myth Drives the Budget Fuss - Nearly everyone believes that Uncle Sam is like a family that must get money before it can spend. But that is not true. A basic function of any sovereign government is to create and run the country’s money system. Unlike a family, the US government is sovereign. It creates money and can never run out. All the words about America’s financial limits mean nothing. Years ago, our money was based on silver and gold. But that did become a limitation when economies around the world needed money to grow faster than metal was dug out of the ground. The US went off the gold standard in 1971, but we still act as if its limitations remain. The economy is often shown as a circular flow of goods and services moving in one direction from producers to consumers, and money to pay for them flowing in the opposite direction. The flow of goods and services slows down when money is removed unless some other party replaces it. The sovereign federal government is the other party. It creates new dollars by spending more into the flow than it removes with taxes. The big bad deficits that haunt so many people are just new dollars that the government creates to replace dollars that savers and importers remove. Moreover, the federal debt that causes so much heartburn is just the sum of all new dollars created since the country began. Truth in labeling would have deficits called something like “new dollars created” or “new savings” and the debt would become “total dollars created” or “total savings”. This is shown every week when savers bid to buy Treasury securities as safe places to put their dollars. The debt is not a liability that will burden future generations, it is an asset that present and future generations of savers will depend on. 

rhare's picture
rhare
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Loads of statist manure


Thorton Parker - via rjs wrote:

A basic function of any sovereign government is to create and run the country’s money system. Unlike a family, the US government is sovereign. It creates money and can never run out. All the words about America’s financial limits mean nothing. Years ago, our money was based on silver and gold. But that did become a limitation when economies around the world needed money to grow faster than metal was dug out of the ground.

I would say it's not a governments job to run a money system.  The only reason the governments take over that job is because you can steal stealthily versus actually having to tax people.  Makes it a lot easier to be elected when you can appear to provide things for free.

Saying the government can just create money and never run out is just stupid.  You have to be really brain dead to think that you can print prosperity.   Exactly how does creating digits in a computer or little pieces of paper equate to things people want or need.  It only works because government says use our money or we will kill you!

I think I will save this little bit and see if in a few years this idiot still thinks America has no financial limits...

Gold and Silver or any other hard currency are limited by the amount able to be dug out of the ground, that's why they make a good currency.  If they were easy to obtain then they would be just like paper. Sound currency forces governments to act responsibly and tax citizens to provide services.  Because taxes are very visible it keeps governments much more constrained, hence the need to get rid of those pesky hard limits.

Thorton Parker wrote:

There are limits: if the government creates too much new money, it can lead to inflation.  But inflation is not a problem now, when millions of people are out of work or not earning adequate incomes because too little money is in circulation.   If our leaders understood how the system works, they would see how easy it would be to prevent serious inflation with taxes.

Gee, I'm sure no politician has ever thought of printing as a way out before!  I'm also really glad to hear that inflation is not a problem. surprise

rjs - I'm assuming you posted this article as an example of the stupidity economists spout.

 

 

 

Time2help's picture
Time2help
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Posts: 2840
rjs wrote: Myth Drives the
rjs wrote:

 Myth Drives the Budget Fuss - Nearly everyone believes that Uncle Sam is like a family that must get money before it can spend. But that is not true. A basic function of any sovereign government is to create and run the country’s money system. Unlike a family, the US government is sovereign. It creates money and can never run out. All the words about America’s financial limits mean nothing. Years ago, our money was based on silver and gold. But that did become a limitation when economies around the world needed money to grow faster than metal was dug out of the ground. The US went off the gold standard in 1971, but we still act as if its limitations remain. The economy is often shown as a circular flow of goods and services moving in one direction from producers to consumers, and money to pay for them flowing in the opposite direction. The flow of goods and services slows down when money is removed unless some other party replaces it. The sovereign federal government is the other party. It creates new dollars by spending more into the flow than it removes with taxes. The big bad deficits that haunt so many people are just new dollars that the government creates to replace dollars that savers and importers remove. Moreover, the federal debt that causes so much heartburn is just the sum of all new dollars created since the country began. Truth in labeling would have deficits called something like “new dollars created” or “new savings” and the debt would become “total dollars created” or “total savings”. This is shown every week when savers bid to buy Treasury securities as safe places to put their dollars. The debt is not a liability that will burden future generations, it is an asset that present and future generations of savers will depend on. 

Errr...umm...nevermind. MillionDollarBonus, is that you?

livewire120v's picture
livewire120v
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Posts: 4
The currency value is the new

The currency value is the new currency created without backing (Fiat).

The Federal debt is spending by the Federal government minus taxes collected (revenue)

Treasuries are bought almost exclusively by private financial institutions (mostly the federal reserve) and foriegn institutions (petroDollars). This equates to debt, that if paid by currency printed out of thin air just reduces the value of our fiat currency by that amount, and increases inflation proportionately over time.

 

Arthur Robey's picture
Arthur Robey
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Posts: 3936
Rats

Errr...umm...nevermind. MillionDollarBonus, is that you?

I'm not going to get into the debate other than to note this little snippet  that the big EXecs (ex-execs?) are abandoning JP Morgan loaded with loot.

The authors benefit from the fact that silver will rise as the perception that the system that brings us fiat money is suffering a loss of confidence.

Hladini's picture
Hladini
Status: Bronze Member (Offline)
Joined: Dec 28 2011
Posts: 83
Greek Medical Cutbacks
My name is Lorrie Sherman and I am one of the ATI facebook page administrators. Most of the time, I post DIY info because nothing will substitute for individual action. Sometimes I post information on the economy because the stagnating economy was the precursor to the Transition Network development.

If you want to know what a collapse looks like t...

hen give yourself a current events lesson from Greece. Greece is in the middle of a collapse and it's not pretty. Unfortunately, the Greeks are still clinging to pre-collapse solutions - which are not really an option.

One example is their health care system. I just read an article describing the loss of health care in Greece. As part of the EU, Greece had universal health care, but it was the monopolized, industrialized, chemicalized standard "sick care" that we all know and love. Before the collapse, you were covered even if you were unemployed. Now with recent (bank imposed) austerities, Greek citizens no longer have health care coverage upon unemployment and this has been going on for a while.

Cancer patients cannot obtain standard cancer treatment like chemo, radiation and surgery. Some doctors have set up "Robin Hood" medical centers where cancer treating drugs are donated from various sources: relatives from dead patients, local pharmacies, pharmaceutical companies, and some are probably stolen.

The succesful response to a collapse in medical care should be ALTERNATIVE. Standard cancer treatments don't really work, anyway. They make the patient more sick and in many, many cases actually kill the patient, it costs a lot of money, and some people are getting really, really rich from it.

What does an alternative solution look like? There are very many alternative choices in cancer treatment which would simultaneously provide alternative jobs. For example there is literature describing mega doses of Vitamin C to treat cancer, hydrogen peroxide treatments, raw food diets, macrobiotics, chelation, the Gerson Institute, herbal remedies, and more. All of these alternatives would provide local jobs, local services, local businesses, and in a collapse situation like Greece could be bartered or payed for in other than fiat currency.

What would be the outcome? First of all, our own body and mind health would be back in our own hands! Second, we would have a health renaissance! Third, there would be plenty of business! Fourth, it is absolutely do-able!

Don't get me wrong. We still need modern medicine for trauma. Modern trauma treatment is fantastically succesful. But modern medicine would have to shrink.

And that's what happens in a collapse - society shrinks. You have to get down to the real necessities and simply cannot afford the "fluff" of wasteful, ineffective, damaging policies. Like our medical care policies.

Imagine the outcome: Healthier people with more money in their pockets!

Unfortunately, the Greek people have not yet begun to organize and take matters into their own hands. So the suffering will continue...........

 
This is a great little clip that keenly illustrates why we need to organize sooner rather than later:
 

 

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